Exhibit 4.2





Exhibit 4.2




AMENDMENT NO. 1 TO COMMON STOCK PURCHASE WARRANT 




This Amendment No. 1 (this “Amendment”) is made as of December 11, 2009 (the
“Effective Date”) by and between MORGANS HOTEL GROUP CO., a Delaware corporation (the
“Company”) and YUCAIPA AMERICAN ALLIANCE FUND II, LLC, a Delaware limited liability company
(the “Holder”).



WHEREAS, the Company and the Holder (together, the “Parties”) entered into a certain
Common Stock Purchase Warrant, dated as of October 15, 2009 (as amended, the “Common Stock
Purchase Warrant”), pursuant to which the Holder has the right to purchase 2,500,000 shares of
the Company’s common stock, par value $0.01 per share; and



WHEREAS, the Parties desire to amend the Common Stock Purchase Warrant in accordance with this
Amendment and pursuant to Section 14(f) of the Common Stock Purchase Warrant.



NOW, THEREFORE, in consideration of the foregoing premises, and the mutual representations,
warranties and covenants contained in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:



1. Definitions. All capitalized terms not otherwise defined in this Amendment have
the respective meanings given to them in the Securities Purchase Agreement, dated as of October 15,
2009 (the “Securities Purchase Agreement”), by and among the Company, the Holder and
Yucaipa American Alliance (Parallel) Fund II, L.P.



2. Amendment. The Parties hereby agree to amend the Common Stock Purchase Warrant,
effective as of the Effective Date, as follows:




	 	(a)	 	The sixth paragraph of Section 1 of the Common Stock
Purchase Warrant is hereby deleted in its entirety and replaced with the
following:
	 
	 	 	 	“Commencement Date” means the earlier of (i) the first Business Day
immediately following the special meeting of stockholders of the Company to
approve the issuance of the Common Stock in connection with the exercise of
the Warrants and (ii) January 29, 2010.
	 
	 	(b)	 	Clause (i) of paragraph (b) of Section 3 of the Common
Stock Purchase Warrant is hereby deleted in its entirety and replaced with
the following:






(i) In the event that the stockholders of the Company do not duly approve
(including, without limitation, approval pursuant to the corporate
governance requirements and listing rules promulgated by the Nasdaq Stock
Market, including Rule 5635 thereof) the issuance of Common Stock in
connection with the exercise of the Warrants and the



 


 









 






Other Warrants, on or prior to January 29, 2010, the Holder shall thereafter
have the right, at any time and from time to time during the Exercise
Period, subject to the vesting requirements of Section 4, to cause the
Company to redeem at the Redemption Price all or any portion of this Warrant
(subject to adjustment on the same basis as is the number of shares for
which this Warrant is exercisable as a result of an event specified in
Section 8(a), 8(b) or 8(c)).



3. Headings. Section headings in this Amendment are included for convenience of
reference only and shall not constitute a part of this Amendment for any other purpose.



4. Entire Agreement. The Common Stock Purchase Warrant, as hereby amended by this
Amendment, along with the Securities Purchase Agreement and the Ancillary Agreements (each, as may
be amended), along with the schedules and the exhibits thereto, contain the entire agreement and
understanding among the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings relating to such subject matter.
None of the Parties shall be liable or bound to any other Party in any manner by any
representations, warranties or covenants relating to such subject matter except as specifically set
forth herein or in the Securities Purchase Agreement or the Ancillary Agreements.



5. No Other Amendments; Conflicts. Except as expressly set forth herein, no
amendments to the Common Stock Purchase Warrant are made by this Amendment. In the event of any
conflict between this Amendment and the Common Stock Purchase Warrant, this Amendment shall
prevail.



6. Counterparts. This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective when one or more
such counterparts have been signed by each of the Parties hereto and delivered to the other Parties
hereto.



7. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York.



[SIGNATURE PAGE FOLLOWS]



 


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IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be executed by its duly
authorized representative as of the date first set forth above.



	 	 	 	 	 
	 	MORGANS HOTEL GROUP CO.

 	 
	 	By:  	/s/ Richard Szymanski	 
	 	 	Name:  	Richard Szymanski	 
	 	 	Title:  	Chief Financial Officer and Secretary	 
	 



	 	 	 	 	 
	 	YUCAIPA AMERICAN ALLIANCE FUND II, LLC

 	 
	 	By:  	/s/ Robert P. Bermingham 	 
	 	 	Name:  	Robert P. Bermingham	 
	 	 	Title:  	Vice President and Secretary